Category Archives: Cryptocurrency

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FinCEN – We Will Identify Where Compliance Is Not Taking Place And Take Appropriate Action

James GattoBy James Gatto on Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency
Last week we reported that FinCEN had issued new guidance addressing cryptocurrency and other convertible virtual currency. The need for compliance was reinforced this week. In a speech by Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence, during blockchain week in NY, a stern warning was issued. The message was clear. Regulatory compliance is … Continue Reading

FinCEN Updates Guidance on Crypto

James GattoBy James Gatto on Posted in Bitcoin, Blockchain, CryptoAssets, Cryptocurrency, FinCEN, Initial Coin Offerings, Regulatory, Virtual Currency
FinCEN has issued  2 new guidance documents addressing cryptocurrency and other convertible virtual currency (CVC). The guidance does not establish any new regulatory expectations. Rather, it consolidates current FinCEN regulations, guidance and administrative rulings that relate to money transmission involving virtual currency, and applies the same interpretive criteria to other common business models involving CVC. … Continue Reading

New Effort to Exempt Crypto Currency from Certain SEC, Tax and Other Regulatory Burdens

James GattoBy James Gatto on Posted in Cryptocurrency, Regulatory, SEC
A new bill, the Token Taxonomy Act was introduced to congress to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, … Continue Reading

Blockchain Games and Collectibles – Patents and Other Legal Issues

James GattoBy James Gatto on Posted in Blockchain, Cryptocurrency, SEC
The use of blockchain (or distributed ledger) technology for games (a.k.a blockchain games) and token-based digital collectibles is on the rise. The overnight popularity of CryptoKitties was as significant to raising the awareness of digital collectibles as Pokémon Go was to location-based AR games. However, the ecosystem extends well beyond CryptoKitties, and is growing rapidly. … Continue Reading

Security Tokens — A Superior Platform for Securities Holding and Trading

James MercerJames ThompsonBy James Mercer and James Thompson on Posted in Blockchain, CryptoAssets, Cryptocurrency, SEC
The use of digital securities or security tokens has coincided with the explosion of crypto-currencies and efforts to establish Internet-traded coins or tokens with utility as a form of currency. Lost amidst the enthusiasm over the revolutionary implications of crypto-currencies is the simple fact that security tokens which use block-chain technology and smart contracts have … Continue Reading

Crypto Firms Make Inroads with State and Federal Regulators

Jeff KernChristopher BoschBy Jeff Kern and Christopher Bosch on Posted in Blockchain, Cryptocurrency, Regulatory
Over the past couple of years, the crypto industry has come under heavy scrutiny from skeptical regulators seeking to root out fraud and protect investors amid the initial coin offering boom that generated over $4 billion in 2017. However, this skepticism is starting to give way to a more business-friendly attitude. Crypto firms have made … Continue Reading

Our Music Festival- Empowering a Decentralized Fanbase with Blockchain

Alexandra BearBy Alexandra Bear on Posted in Cryptocurrency, Virtual Currency
Distributed ledger technology is continuing to be thought of as the technology that can address some of the issues that plague the music and content-creation space. Our Music Festival (“OMF”) is relying on this technology to develop a music festival and fan-interaction network that will be powered by its currency token, known as an “OMF … Continue Reading

CFTC Cryptocurrency Enforcement Receives Further Judicial Support

William KaneBy William Kane on Posted in CFTC, Cryptocurrency
The Commodity Futures Trading Commission (“CFTC”) obtained an important court win and boost to its regulatory authority over Cryptocurrencies this month. A federal district court in Massachusetts recently issued a decision in CFTC v. My Big Coin Pay Inc. which affirmed the CFTC’s position that all virtual currencies are commodities and subject to CFTC jurisdiction.[1] … Continue Reading

Airdrop of Crypto Tokens Hits Regulatory Flak

Robert Wernli, Jr.Robert WeberOsama KhanBy Robert Wernli, Jr., Robert Weber and Osama Khan on Posted in Cryptocurrency, Initial Coin Offerings, Regulatory, SEC
On August 14, 2018, the U.S Securities and Exchange Commission (“SEC”) issued a cease and desist order (the “Tomahawk Order”) against Tomahawk Exploration LLC (“Tomahawk”) and David Thompson Laurance (“Laurance”) for their actions in connection with an initial coin offering of digital assets called “Tomahawkcoins” or “TOM” (the “Tomahawk ICO”). Tomahawk and Laurance’s actions were … Continue Reading

Court Rules Cryptocurrencies Can Be Regulated By The CFTC As Commodities

James GattoAndrea CataneoBy James Gatto and Andrea Cataneo on Posted in CFTC, Cryptocurrency
The regulatory landscape surrounding cryptocurrency continues to evolve. Most of the activity to date has involved regulatory enforcement actions brought by the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) and focused primarily on exposing fraud rather than providing guidance. Some people have questioned whether the CFTC has jurisdiction in this space. … Continue Reading

Is there a Unicorn Among ICO Issuers?

James GattoBy James Gatto on Posted in Blockchain Games, Cryptocurrency, Initial Coin Offerings
The United States Securities and Exchange Commission (“SEC”) has indicated that nearly all initial coin offering (“ICO”) filings they have seen are securities offerings. Based on this expansive view, it may be more likely to find a Unicorn than an ICO that is not a securities offering. Ironically, a recent lawsuit was filed against Unikrn, … Continue Reading

SEC Blockchain and Crypto Update

James GattoBy James Gatto on Posted in Blockchain, Cryptocurrency, SEC
The SEC has been busy over the past couple of weeks addressing blockchain and crypto-related issues. ETF Activity The SEC rejected, for a second time, a request by the Winklevoss brothers for a Bitcoin exchange-traded fund. The primary reason given by the SEC was that the submission did not sufficiently explain how the ETF would … Continue Reading

Apple Updates Cryptocurrency Aspects of App Store Review Guidelines

James GattoBy James Gatto on Posted in Cryptocurrency, Initial Coin Offerings
Apple’s App Store Review Guidelines have been updated to address various aspects of cryptocurrency. Some of the relevant provisions include the following. One of the provisions relates to prevents an app from including ads that run background processes such as crypto mining. This is a tactic that has arisen, unbeknownst to many users. The relevant … Continue Reading

New York’s AG Enters the Cryptocurrency Ring as Federal, State Authorities Find Regulatory Footing

Jeff KernChristopher BoschBy Jeff Kern and Christopher Bosch on Posted in Blockchain, Cryptocurrency, Regulatory
On April 17, 2018, the New York State Attorney General (“NYAG”) sent a “Virtual Markets Integrity Initiative Questionnaire” to 13 companies operating virtual currency trading platforms. The questionnaire consists of 34 questions covering a number of topics, including ownership and control, operation and fees, trading policies and procedures, outages and other suspensions of trading, internal … Continue Reading

Tokenalysis

Richard A. FriedmanBy Richard A. Friedman on Posted in Cryptocurrency
Read the full article here, authored by Richard A. Friedman. An excerpt: “I. A few general things to consider – tokenality: Is the token being acquired by investors seeking a return on investment (ROI)? Is the token being acquired by investors in order to become a member and/or be admitted to a group (i.e., includes … Continue Reading

Crypto-Crime: The SEC and DOJ Go After BitFunder and Its BitFounder

Jonathan E. MeyerBy Jonathan E. Meyer on Posted in Bitcoin, Cryptocurrency, SEC
Taking further steps into the world of cryptocurrency, two entities of the federal government recently took legal action against BitFunder, a now-defunct Bitcoin exchange, and its founder, Jon Montroll. The Securities and Exchange Commission filed civil charges against BitFunder and Montroll, and the U.S. Attorney’s Office in Manhattan brought criminal charges of perjury and obstruction … Continue Reading

Patent Strategies for Cryptocurrencies and Blockchain Technology

James GattoBy James Gatto on Posted in Blockchain, Cryptocurrency, Patents
Cryptocurrencies and blockchain technology are rapidly emerging as disruptive technologies. As has happened with many new technologies, particularly disruptive ones, a patent arms race is occurring. The number of patents being filed for these technologies is rapidly increasing. The number of published applications shows roughly a tenfold increase over the number of issued patents. Despite … Continue Reading
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